The cost of May futures for the American WTI crude oil dropped below $ 15 per barrel – this is the minimum since the end of the last century. Under such conditions, individual Texas companies began selling raw materials for two dollars, writes Bloomberg.
The collapse of oil quotes is associated with concerns about the overflow of oil storage in the United States. Experts do not exclude the possibility that if the situation does not change in the near future, then producers will massively begin to pay customers to take oil. Previously, only isolated such cases were recorded.
WTI shipments in June also fall by more than 5 percent from the start of the day. The grade is trading at $ 23.6 per barrel. Brent brand cheaper less rapidly – 2.8 percent and 27.3 dollars.
A week after the conclusion of a transaction in the OPEC + format, in which 23 countries agreed to reduce production by 9.7 million barrels per day, it became clear that this would not be enough.
It was expected that countries outside the deal, primarily the United States, would also announce a reduction in production, so that in aggregate the volume amounted to 15-20 million barrels. But at present, there is no information about such obligations, and the supply of raw materials exceeds demand already by 25 million barrels.
In Washington, they indicate that they are not able to reduce production through industry regulation. According to sources, the U.S. President Donald Trump’s administration has come up with a way to pay compensation to companies to stop production, but Congress needs approval. And Texas oil workers insist on banning imports from Saudi Arabia. Since the crisis began, the kingdom has quadrupled its supply of raw materials to the United States and is pushing local companies out of the market.